Home >News >India >India’s SaaS revenue set to jump 6X to $13-15 billion by 2025: Nasscom report
In terms of revenue, India’s SaaS revenue has reached $3.5 billion as of March, 2020, growing at 30% CAGR, with 75% of it coming from global sales (Photo: HT)
In terms of revenue, India’s SaaS revenue has reached $3.5 billion as of March, 2020, growing at 30% CAGR, with 75% of it coming from global sales (Photo: HT)

India’s SaaS revenue set to jump 6X to $13-15 billion by 2025: Nasscom report

The Indian SaaS landscape has grown 1.5X faster than the global SaaS market due to acceleration in digital consumption caused by the crisis

Despite the market disruption caused by the covid-19 pandemic, software-as-a-service (SaaS) has emerged as a bright spot, seeing both growth and investment opportunities.

The Indian SaaS landscape has grown 1.5X faster than the global SaaS market due to acceleration in digital consumption caused by the crisis.

In terms of revenue, India’s SaaS revenue has reached $3.5 billion as of March, 2020, growing at 30% CAGR, with 75% of it coming from global sales, according to a new collaborative report by Nasscom in partnership with SaaSBOOMi ( a community of Indian SaaS founders,) and Zinnov.

The report “Riding the Storm: Towards the Giant India SaaS Opportunity," claims that India can become a global hub for SaaS by 2025 by strengthening the ecosystem that includes a strong push from the government, access to a strong funding pipeline and focus on building SaaS skillsets and an effective Industry mentorship program.

“The government is deeply committed to making India a major centre of software as a service and we will walk along with you as you make progress," said Ajay P Sawhney, secretary, Ministry of Electronics and Information Technology (Meity).

According to the report, top Indian pure-play vendors are dominating the SaaS market, with the top five vendors accounting for about 33% of marketshare.

“It is phenomenal to see SaaS emerging as a key growth driver for the country. As a technology industry, we have barely scratched the surface when it comes to use cases that can be delivered via SaaS to benefit across sectors," said Debjani Ghosh, President, Nasscom.

The SaaS industry in India has witnessed accelerated growth in the past couple of years, with 75% of the demand for Indian SaaS products coming from overseas markets. India’s burgeoning start-up landscape and its rapid strides in digital adoption are one of the key contributors to the growing SaaS adoption in the country. Currently, India has 6 SaaS unicorns—Zoho, Freshworks, Druva, Icertis, HighRadius and Postman—and is expected to see the emergence of many more by 2025.

The industry is also seeing an increase in investment sentiment from key Indian and global investors. SaaS funding in India has grown by 15% CAGR over the last 3 years.

The Indian SaaS industry today has more than 1,000 companies with 150+ companies generating an annual recurring revenue (ARR) greater than $1 million and is on the way to become the global hub for SaaS.

India’s success in the SaaS landscape is largely attributed to a large skilled talent pool, competitive pricing as compared to European and American markets, and a strong ecosystem. India has more than 3 million software developers and 100,000 SaaS developers as of 2019, according to the report.

There is a huge opportunity for India to tap the global SaaS market. It is estimated that by 2025, the global addressable market for SaaS will be around $400 billion. For India to ride on this huge untapped marketshare, Indian SaaS companies need to ensure business continuity during times like covid-19, enhance its existing value proposition, identify growth opportunities, and customize go to market strategies.

“India today needs greater cross industry collaborations, supportive government policy, and investment in deep technologies, to further the growth of the SaaS industry exponentially," added Ghosh.

Saas startup founders are bullish about the opportunity.

“SaaS is India’s trillion dollar opportunity, and we should position ourselves as the next Saas destination of the world, since we have deep B2B domain expertise. The beauty of SaaS is that funding and location both are non-consequential.. wealth creation and IP creation need not be concentrated in metros but can be spread throughout the country," Suresh Sambandam, CEO, Kissflow, a software startu.

By 2025, the pure-play India SaaS industry currently at $2.5Bn revenues, has the potential to grow to $13-15 Billion, clocking a 6X growth. Some measures include building India’s brand as a ‘Global SaaS hub’ through marketing, visibility and trust, building a non-VC funding model requiring to grow current SaaS industry base, creating specialized SaaS focused accelerators & incubators and promote tier-II/III and non-metro locations to develop SaaS companies in India.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.

Close
×
My Reads Redeem a Gift Card Logout